A new report on the future of investigative journalism has put the spotlight on the largely unregulated PR industry and called for the introduction of tougher regulations.

The Lords Communication Committee has been taking evidence from across the media over the last six months, with much of it focused on the 'adverse impact'of public relations on investigative journalism, and concluded that PRs should be forced to abide by a 'stringent code of behaviour".

This could be derived from the existing Chartered Institute of Public Relations (CIPR) – but at present just one sixth of PRs are signed up to body's code of conduct.

'It is very much an unregulated activity, and there is currently no comprehensive system of self-regulation,'said today's report.

'However, given the CIPR is a voluntary organisation, its capacity to enforce its code seems, in practice, to be relatively light and of course, its current reach only extends into a small part of this industry.

'This has highlighted the real need for the responsible PR industry to strengthen its internal system of self-regulation, and thereby increase public confidence in their industry and their work."

The committee also recommended that journalists themselves become more transparent in their use of press releases, 'particularly online where barriers to publishing links to press releases are low".

The committee's wide-ranging report also made recommendations on ownerships rules, VAT exemptions, funding, social media and the public interest.

Newspaper industry in 'financial crisis'

It concluded that the newspaper industry as a whole was facing a 'huge financial crisis'and that a national level 'there is now a crisis in the printed press which is facing unprecedented challenges".

'At a local level, the economic pressures are even more severe," it added. "This has created a serious threat to investigative journalism and hence to democratic accountability in local areas."

This had a 'profound effect'on national media because it meant local news outlets no longer provided a training ground for the national titles

Another major area of interest for the committee was in establishing the public interest for news providers who break the law in the course of obtaining a story.

It did not recommend that relevant criminal law be redrafted to a allow a statutory defence relating to the public interest, but did urge prosecuting authorities to 'publish their broad approach'to determining which cases should be prosecuted where illegal activity was undertaken by journalists in the course of a story.

The Director of Public Prosecutions Keir Starmer outlined plans for an interim policy to be put in place before a formal policy is drawn up later this year when he appeared at the Leveson Inquiry last week.

The report also found that media organisations should take responsibility for the decisions they take regarding investigations in a way that is 'rigorous, structured and leaves an audit trail for future external scrutiny".

It recommended they implement a 'two-stage internal management process'in which they 'track and formally record their decisions first to investigate and secondly to publish a story if such decisions rely on the public interest".

Media ownership rules

On the ownership front the committee urged Ofcom, Leveson and the Government to consider whether public interest tests for media mergers should be extended to include cases of 'organic growth", whether the public interest test in media mergers should remain solely with the Secretary of State, and whether the 'fit and proper person' test should be extended to cover newspaper mergers.

It recommended that the public interest test should be invoked in cases where a news organisation develops more than a 25 per cent share of the national newspaper market through 'organic growth", and that Ofcom could also take on responsibility for applying the 'fit and proper' test to newspapers.

The media watchdog's role in assessing local media mergers should also be strengthened over that of the Competition Commission so that more weight is given to the 'vital watchdog and informational role of the local media".

This appears to be a recommendation in response to the scuppered newspaper merger between Northcliffe titles in Kent and the KM Group last year, which raised widespread concerns at the time.

The committee also called on the Charity Commission to 'provide greater clarity and guidelines on which activities related to the media, and in particular investigative journalism, are charitable in the current state of the law".

It said: 'While recognising the Government's current disinclination to legislate in this area, it seems to us that reform of charity law is the only way in which certainty in this area could be achieved. We therefore urge the Government to reconsider."

The committee did, however, rule out public funding for news organisations given the 'strong independent character of the printed press in the UK and our political traditions".

Instead it supported existing state subsidies in the form ofthe zero-VAT rating for newspapers.

Vital role of investigative journalism

Another recommendation related to the introduction of fines for newspapers who breach the PCC[2] Editors' Code of Practice, a proposal mooted several times over the last few months.

If it was introduced then the committee recommended that a proportion of all media fines (including fines for breaches of the Ofcom Broadcasting Code) should be allocated to a 'fund reserved for financing investigative journalism or for the training of investigative journalists".

'This fund should be open to all investigative journalists and journalism organisations–big and small, who publish in print, broadcast or online,'the committee said in its report.

On the use of social media by journalists, the PCC was urged to tighten up its guidance on the use of information provided by citizen journalists using social media and warned journalists to be 'extra vigilant in verifying information found online".

Committee chairman Lord Inglewood said it had been working against the backdrop of 'perhaps the greatest political media scandal of a generation'but recognised that investigative journalism played a 'vital role'in the UK.

The journalistm industry had faced 'unprecedented scrutiny over recent months and it faces a number of profound economic, legal and regulatory challenges", the committee said.

'News organisations, regulators and relevant legal bodies therefore need to make sure, as changes and new measures are introduced, that these are not rooted in the past but seek to enable responsible investigative journalism to flourish in the future,'Lord Inglewood said.

'We are encouraged, nonetheless, by the number of new funding and organisational initiatives that have started to materialise as a means of promoting investigative journalism, and believe it is vital that measures are taken to support and foster further initiatives which are independent of public subsidies or state support."